<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
--------
FORM 8-K
--------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report September 2, 1997
(Date of earliest event reported): August 22, 1997
HARBINGER CORPORATION
(Exact name of Company specified in its charter)
GEORGIA 0-26298 58-1817306
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.
1055 LENOX PARK BOULEVARD, ATLANTA, GEORGIA 30319
(Address of principal executive offices) (Zip Code)
(404) 467-3000
(Company's telephone number, including area code)
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<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
Effective August 22, 1997, Harbinger Corporation, a Georgia corporation
(the "Company"), acquired from FD Engineers and Constructors, Inc., a California
corporation ("FD"), all of the outstanding capital stock of Acquion, Inc., a
California corporation ("Acquion") and a wholly owned subsidiary of FD (the
"Acquisition"). The Acquisition was consummated in accordance with the terms of
a Stock Purchase Agreement ("Stock Purchase Agreement"), dated August 22, 1997,
among the Company, FD and Fluor Corporation, a Delaware corporation ("Fluor").
The consideration paid by the Company in connection with the Acquisition
was approximately $12.0 million in cash, which amount is subject to adjustment
based on the net assets of Acquion on the Closing Date. In connection with the
Acquisition, which was accounted for under the purchase method of accounting,
the Company expects to take an $11-$14 million charge in the third quarter of
1997 for in process research and development and integration related charges.
The Company financed the Acquisition through its working capital.
The total consideration paid in the Acquisition was determined through arms
length negotiations between representatives of the Company and FD. Neither the
Company nor any of its affiliates had, nor to the knowledge of the Company, did
any director or officer or any associate of any such director or officer of the
Company have, any material relationship with FD, Acquion or Fluor prior to the
Acquisition. The tangible assets acquired in the Acquisition were used in
developing Maintenance Repair and Operations ("MRO") software catalogs and
content, and the Company intends to use such assets for substantially the same
purpose.
Acquion's strategic focus is on supply chain management and purchasing
related services utilizing electronic commerce technology. To date, Acquion has
provided innovative MRO electronic supplier catalogs that offer up to date
information. Acquion offers clients robust MRO catalog content and cataloging
expertise as evidenced by their catalog content for leading chemical,
petrochemical and industrial corporations and universities. These electronic
catalogs are among the first to be integrated into today's enterprise and legacy
computer systems. Acquion was formed in 1994 as a subsidiary of FD and is
headquartered in Greenville, South Carolina.
A complete description of the Acquisition is contained in the Stock
Purchase Agreement filed as Exhibit 2(a) and incorporated herein by reference.
<PAGE> 3
Item 7. Financial Statements and Exhibits.
a) Financial Statements of Business Acquired: To be filed by amendment as
soon as practicable but not later than 75 days after the date of the
reported event.
b) Pro Forma Financial Information: To be filed by amendment as soon as
practicable but not later than 75 days after the date of the reported
event.
c) Exhibits:
2.1 Stock Purchase Agreement by and among Harbinger Corporation,
Fluor Corporation and FD Engineers & Constructors, Inc., dated as
of August 22, 1997. The Exhibits and Disclosure Schedules, which
are referenced in the table of contents and elsewhere in the Stock
Purchase Agreement, are hereby incorporated by reference. Such
Exhibits and Disclosure Schedules have been omitted for purposes
of this filing, but will be furnished supplementally to the
Commission upon request.
99.1 Text of Press Release of Harbinger Corporation, dated August
25, 1997.
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HARBINGER CORPORATION
/s/ Joel G. Katz
-----------------------------
JOEL G. KATZ
Chief Financial Officer
(Principal Financial Officer;
Principal Accounting Officer)
Date: September 2, 1997
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page No.
------- --------
<S> <C> <C>
2.1 Stock Purchase Agreement by and among Harbinger Corporation,
Fluor Corporation and FD Engineers & Constructors, Inc.,
dated as of August 22, 1997. The Exhibits and Disclosure
Schedules, which are referenced in the table of contents and
elsewhere in the Stock Purchase Agreement, are hereby
incorporated by reference. Such Exhibits and Disclosure
Schedules have been omitted for purposes of this filing, but
will be furnished supplementally to the Commission upon
request.
99.1 Text of Press Release of Harbinger Corporation, dated
August 25, 1997
</TABLE>
<PAGE> 1
EXHIBIT 2.1
- ------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
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among
HARBINGER CORPORATION
FLUOR CORPORATION
and
FD ENGINEERS & CONSTRUCTORS, INC.
dated August 22, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1. SALE OF STOCK; CLOSING .............................................. 9
SECTION 1.1. PURCHASE AND SALE ................................................. 9
SECTION 1.2. PURCHASE PRICE .................................................... 10
SECTION 1.3. CLOSING ........................................................... 10
SECTION 1.4. FURTHER ASSURANCES ................................................ 10
SECTION 1.5. POST-CLOSING ADJUSTMENT TO PURCHASE PRICE ......................... 10
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF COMPANY AND SELLER ................ 11
SECTION 2.1. ORGANIZATION ...................................................... 11
SECTION 2.2. AUTHORIZATION ..................................................... 11
SECTION 2.3. ABSENCE OF RESTRICTIONS AND CONFLICTS ............................. 12
SECTION 2.4. CAPITALIZATION .................................................... 12
SECTION 2.5. SUBSIDIARIES ...................................................... 13
SECTION 2.6. FINANCIAL STATEMENTS .............................................. 13
SECTION 2.7. ABSENCE OF CERTAIN CHANGES, UNDISCLOSED LIABILITIES ............... 13
SECTION 2.8. LEGAL PROCEEDINGS ................................................. 14
SECTION 2.9. COMPLIANCE WITH LAW ............................................... 14
SECTION 2.10. MATERIAL CONTRACTS ............................................... 14
SECTION 2.11. PREMISES ......................................................... 16
SECTION 2.12. TAX RETURNS; TAXES ............................................... 16
SECTION 2.13. LABOR MATTERS .................................................... 16
SECTION 2.14. EMPLOYEE BENEFIT PLANS ........................................... 17
SECTION 2.15. LABOR RELATIONS .................................................. 18
SECTION 2.16. INSURANCE ........................................................ 18
SECTION 2.17. TITLE TO PROPERTIES AND RELATED MATTERS .......................... 18
SECTION 2.18. ENVIRONMENTAL MATTERS ............................................ 18
SECTION 2.19. TRADEMARKS, TRADE NAMES .......................................... 19
SECTION 2.20. COMPANY'S COMPUTER SOFTWARE AND HARDWARE ......................... 19
SECTION 2.21. TRANSACTIONS WITH AFFILIATES ..................................... 20
SECTION 2.22. BROKERS, FINDERS AND INVESTMENT BANKERS .......................... 21
SECTION 2.23. CUSTOMERS ........................................................ 21
SECTION 2.24. INVESTMENT COMPANY; HOLDING COMPANY .............................. 21
SECTION 2.25. CERTAIN PAYMENTS ................................................. 21
SECTION 2.26. MILLENNIUM COMPLIANCE ............................................ 21
SECTION 2.27. RECEIVABLES ...................................................... 22
SECTION 2.28. DISCLOSURE ....................................................... 22
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER.............................. 22
SECTION 3.1. ORGANIZATION ...................................................... 22
SECTION 3.2. AUTHORIZATION ..................................................... 23
SECTION 3.3. ABSENCE OF RESTRICTIONS AND CONFLICTS ............................. 23
SECTION 3.4. INVESTMENT REPRESENTATION ......................................... 23
ARTICLE 4. POST-CLOSING COVENANTS AND ADDITIONAL AGREEMENTS OF SELLER AND BUYER. 23
SECTION 4.1. CONFIDENTIALITY ................................................... 23
SECTION 4.2. EMPLOYEES; WARN ACT COMPLIANCE .................................... 23
SECTION 4.3. REASONABLE EFFORTS; FURTHER ASSURANCES; COOPERATION ............... 24
SECTION 4.4. CERTAIN TAX MATTERS ............................................... 24
SECTION 4.5. ADDITIONAL AGREEMENTS ............................................. 25
SECTION 4.6. LATER INVESTMENT BY SELLER ........................................ 25
SECTION 4.7. USE OF BUYER'S SOFTWARE ........................................... 25
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 4.8. REFERENCES; SUPPLIERS ............................................. 25
SECTION 4.9. NONCOMPETE AND NONSOLICITATION .................................... 25
SECTION 4.10. DISSOLUTION OF DAQ AND RAPIDS .................................... 26
SECTION 4.11. LEASE ............................................................ 26
SECTION 4.12. EMPLOYEE BENEFIT PLANS ........................................... 27
ARTICLE 5. DELIVERIES AT CLOSING ............................................... 28
SECTION 5.1. DELIVERIES BY SELLER .............................................. 28
SECTION 5.2. DELIVERIES BY BUYER ............................................... 29
SECTION 5.3. ASSIGNMENT AND ASSUMPTION AGREEMENT ............................... 29
ARTICLE 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION ...... 29
SECTION 6.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES ........................ 29
SECTION 6.2. INDEMNIFICATION BY THE SELLER ..................................... 30
SECTION 6.3. INDEMNIFICATION BY BUYER .......................................... 33
SECTION 6.4. LIABILITY LIMITS; WAIVER OF CONSEQUENTIAL DAMAGES ................. 36
SECTION 6.5. GUARANTEE ......................................................... 36
ARTICLE 7. CERTAIN DEFINITIONS ................................................. 37
ARTICLE 8. MISCELLANEOUS PROVISIONS ............................................ 39
SECTION 8.1. NOTICES ........................................................... 39
SECTION 8.2. ENTIRE AGREEMENT; MODIFICATIONS AND AMENDMENTS .................... 39
SECTION 8.3. ASSIGNMENT; SUCCESSORS-IN-INTEREST ................................ 40
SECTION 8.4. NUMBER; GENDER .................................................... 40
SECTION 8.5. CAPTIONS .......................................................... 40
SECTION 8.6. CONTROLLING LAW; INTEGRATION ...................................... 40
SECTION 8.7. KNOWLEDGE OF COMPANY, SELLER AND BUYER ............................ 40
SECTION 8.8. SEVERABILITY ...................................................... 40
SECTION 8.9. COUNTERPARTS ...................................................... 41
SECTION 8.10. ENFORCEMENT OF CERTAIN RIGHTS .................................... 41
SECTION 8.11. WAIVER ........................................................... 41
SECTION 8.12. FEES AND EXPENSES ................................................ 41
SECTION 8.13. FURTHER ASSURANCES ............................................... 41
SECTION 8.14. PUBLIC ANNOUNCEMENTS ............................................. 41
SECTION 8.15. INTEREST ......................................................... 41
</TABLE>
<PAGE> 4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of August 22, 1997 (the
"Agreement"), by and among HARBINGER CORPORATION, a Georgia corporation
("Buyer"), FLUOR CORPORATION, a Delaware corporation ("Parent"), and FD
ENGINEERS & CONSTRUCTORS, INC., a California corporation and a wholly owned
subsidiary of Parent ("Seller").
W I T N E S S E T H:
WHEREAS, Seller owns all the issued and outstanding shares (the "Shares")
of common stock, no par value (the "Common Stock"), of Acquion, Inc., a
California corporation (the "Company");
WHEREAS, Company owns and licenses electronic catalogue solutions and
provides supplier content for its electronic catalogue solution worldwide (the
"Business");
WHEREAS, Parent has agreed to guarantee the obligations of Seller
hereunder;
WHEREAS, Buyer desires to purchase from Seller and Seller desires to sell
to Buyer, all of the issued and outstanding Shares of Common Stock upon the
terms and subject to conditions set forth herein; and
WHEREAS, the parties desire that the transaction be taxed in accordance
with Section 338(h)(10) of the Internal Revenue Code of 1986, as amended (the
"Code"), and that Seller be solely responsible for all tax liability incurred
thereby.
NOW THEREFORE, in consideration of the foregoing, the mutual covenants,
agreements, representation and warranties contained in this Agreement and other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
ARTICLE 1.
SALE OF STOCK; CLOSING
Section 1.1. Purchase and Sale. On the basis of the representations,
warranties, covenants and agreements set forth herein, Buyer hereby purchases
from Seller and Seller hereby sells, conveys and assigns to Buyer 1,000 Shares
of Common Stock, which shares constitute all of the issued and outstanding
capital stock and securities of the Company.
<PAGE> 5
Section 1.2. Purchase Price. In consideration of the sale of all the Shares
of Common Stock, and the representations, warranties, covenants and agreements
of Seller set forth herein, Buyer is paying and will pay to Seller the sum of
$11,991,875.00 (the "Purchase Price") as set forth below.
Section 1.3. Closing. The Closing of the purchase and sale of the Shares
(the "Closing") is being held contemporaneously with the execution and delivery
of this Agreement at the offices of Morris, Manning & Martin, L.L.P., 1600
Atlanta Financial Center, 3343 Peachtree Road, N.E., Atlanta, Georgia, at 10:00
a.m., local time, on the date hereof. The date of the Closing is the "Closing
Date." The Closing shall be deemed to have occurred and shall be effective for
all purposes as of 11:59:59 p.m. on the Closing Date.
Section 1.4. Further Assurances. Seller from time to time after the
Closing, will execute and acknowledge and deliver to Buyer such other
instruments of conveyance and transfer and will take such other actions and
execute and deliver such other documents, certifications and further assurances
as Buyer may reasonably request in order to vest more effectively in Buyer, or
to put Buyer more fully in possession of any of the assets of the Company;
provided that Buyer shall reimburse Seller for its reasonable out-of-pocket
costs and expenses; provided, however, that Seller shall be responsible for such
expenses in connection with fulfilling its obligations under Article 4. Each of
the parties hereto will cooperate with the other and will, at the cost and
expense of the party requesting the same, execute and deliver to the other such
other instruments and documents and take such other actions as may be reasonably
requested from time to time by any party hereto as necessary to carry out,
evidence and confirm the intended purposes of this Agreement. Seller agrees to
provide assistance to Buyer as reasonably requested by Buyer (including
reasonable access to Seller's books and records) in connection with Buyer's
audit of the Financial Statements required pursuant to the securities laws.
Section 1.5. Post-Closing Adjustment to Purchase Price.
(a) As promptly as practicable following the Closing Date, the
Buyer shall prepare a balance sheet of Company as of the Closing Date (the
"Closing Date Balance Sheet"). The Closing Date Balance Sheet shall be prepared
in accordance with generally accepted accounting principles consistent with past
practices of the Company.
(b) The Seller shall have the right to review fully all work
papers and audit procedures relating to preparation of the Closing Date Balance
Sheet in order to confirm that it has been prepared in accordance with Section
1.5 (a) hereof. The Seller shall complete its review of such Statement hereunder
within thirty (30) days after such Balance Sheet, and related documentation,
have been made available for its review. If the Seller believes that any
adjustment should be made to such Balance Sheet in order for said amounts to be
determined in accordance with the requirements of this Section, Seller shall
give the Buyer written notice of such adjustments. If Buyer agrees with the
adjustments proposed by the Seller, the adjustment shall be made to such
Statement. If there are proposed adjustments which are disputed by the Buyer,
then the Seller and the Buyer shall negotiate in good faith to resolve all
disputed adjustments. If, after a period of thirty (30) days following the date
on which the Seller gives the Buyer written notice of any proposed adjustments,
any such adjustments still remain disputed,
<PAGE> 6
the Atlanta office of KPMG Peat Marwick shall be engaged to resolve any
remaining disputed adjustments in accordance with this Agreement and the
decision of such firm shall be final and binding on the parties hereto. Payment
required hereunder shall be tendered within three (3) business days after the
earlier of the agreement of the parties on the amount thereof or a written
notice of any resolution of such amount has been given by KPMG Peat Marwick to
the parties hereunder. All fees and expenses of KPMG Peat Marwick incurred in
connection with such resolution shall be prorated between the parties as follows
so that the prevailing party bears a lesser amount of such fees and expenses:
The difference between the amount of adjustments sought by the parties
shall be calculated (the "Disputed Amount"). Each party shall pay that
portion of KPMG Peat Marwick's expenses equal to the percentage that the
difference between the amount of adjustment sought by that party and the
amount ultimately determined by KPMG Peat Marwick bears to the Disputed
Amount.
Except as set forth in the preceding sentence, Buyer and Seller shall each pay
its own costs incurred in connection with this Section 1.5 (b), including legal
and accounting fees.
(c) In the event that the amount calculated by subtracting the
current liabilities from the current assets as set forth on the Closing Date
Balance Sheet (the "Adjusted Net Worth") is greater than $906,000, Buyer shall
pay Seller the difference between the Adjusted Net Worth and $906,000. If the
Adjusted Net Worth is less than $906,000, Seller shall pay to Buyer the
difference between $906,000 and the Adjusted Net Worth.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF COMPANY AND SELLER
With such exceptions as are set forth in a letter (the "Seller Disclosure
Letter") delivered by Seller to Buyer prior to the execution hereof, Seller
hereby represents and warrants to Buyer that:
Section 2.1. Organization. Each of Seller and Company are corporations duly
organized, validly existing and in good standing under the laws of the State of
California, with all requisite corporate power and authority to own, lease and
operate its properties and to carry on its Business as now being conducted and
to consummate the transactions contemplated hereby. Each of Company and Seller
are duly qualified to transact its business, and is in good standing in its
state of incorporation, and Company is in good standing as a foreign corporation
in each jurisdiction where the character of its activities requires such
qualification. Company and Seller have delivered to Buyer true, correct and
complete copies of the Certificate or Articles of Incorporation and Bylaws or
other governing documents, as currently in effect and has made available to
Buyer for review all of Company's minute books and stock records, and such stock
records are correct and complete, and accurately reflect the ownership of
Company capital stock.
Section 2.2. Authorization. Each of Company and Seller have full corporate
power and authority to execute and deliver this Agreement and the agreements,
documents, assignments
<PAGE> 7
and instruments to be executed and delivered by it pursuant to this Agreement
(the "Other Agreements") and to perform its obligations under this Agreement and
the Other Agreements to which it is a party, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each of Company
and Seller of this Agreement and the Other Agreements to which it is a party,
the performance by each of Company and Seller of its obligations hereunder and
thereunder and the consummation of the transactions provided for herein and
therein will have been duly and validly authorized by all necessary corporate
action of its Board of Directors. This Agreement constitutes, and when executed
and delivered the Other Agreements will constitute, the legal, valid and binding
obligations of Seller or Company as applicable, enforceable against it in
accordance with the respective terms hereof and thereof. The Lease constitutes
the legal, valid and binding obligation of Fluor Daniel, Inc. and Daniel
International Corporation.
Section 2.3. Absence of Restrictions and Conflicts. The execution, delivery
and performance of this Agreement and the Other Agreements, the consummation of
the transactions contemplated hereby and thereby and the fulfillment of and
compliance with the terms and conditions of this Agreement and the Other
Agreements do not and will not, with the passing of time or the giving of notice
or both, violate or conflict with, constitute a breach of or default under,
result in the loss of any material benefit under, or permit the acceleration of
any obligation under, (i) any term or provision of the Articles or Certificate
of Incorporation or Bylaws of Seller or Company, (ii) any Contract to which it
is a party, (iii) any judgment, decree or order of any court or governmental
authority or agency to which Seller or Company is a party or by which Seller or
Company or any of its properties is bound, or (iv) any statute, law, regulation
or rule applicable to Seller or Company. No consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
agency or public or regulatory unit, agency, body or authority with respect to
Seller or Company is required in connection with the execution, delivery or
performance of this Agreement or the Other Agreements by Seller or Company or
the consummation of the transactions contemplated by this Agreement or the Other
Agreements by Company. Seller is the sole record and beneficial owner of the
Shares, free and clear of any liens, claims, charges, security interests,
options or other legal or equitable encumbrances of any nature. Seller has the
full legal right, power and authority to sell, assign, transfer and deliver the
Shares to Buyer, free and clear of any liens, claims, charges, security
interests, options or other legal or equitable encumbrances. Upon delivery of
the Shares as contemplated by this Agreement, Buyer will acquire title to the
Shares, free and clear of any liens, claims, charges, security interests,
options or other legal or equitable encumbrances (except for legal restrictions
on sales of unregistered shares).
Section 2.4. Capitalization. The authorized capital stock of the Company
consists of 10,000 Shares of Common Stock, of which 1,000 Shares are outstanding
and no shares are held as treasury shares. All of the outstanding Shares of
Common Stock have been duly and validly authorized and issued, and such shares
are all fully paid and nonassessable. No shares of the Company's capital stock
have been issued in violation of any preemptive rights, rights of first refusal
or similar restrictions. There are no (i) options, warrants, liens, pledges,
mortgages, encumbrances, or other rights (including preemptive rights) of any
kind relating to the sale, issuance or voting of any shares of capital stock of
any class of the Company which have been issued, granted or entered into by the
Company; (ii) securities convertible into, exchangeable for or evidencing the
right to purchase any shares of capital stock of any class of the Company; or
<PAGE> 8
(iii) contracts, commitments, agreements, understandings or arrangements of any
kind relating to the issuance of shares of capital stock of any class of the
Company, any convertible or exchangeable securities or any such options,
warrants or other rights. All securities heretofore sold by the Company have
been issued in compliance with all applicable corporate and securities laws,
including without limitation, the Securities Act of 1933, as amended, and all
applicable state "blue sky" laws. The Company has not repurchased, redeemed or
canceled or reacquired shares of its capital stock.
Section 2.5. Subsidiaries. Except as set forth in Schedule 2.5, Company has
no subsidiaries, Company has not in the past and does not currently own,
directly or indirectly, any capital stock or other equity, ownership,
proprietary or voting interest in any Person.
Section 2.6. Financial Statements. Company has made available to Buyer the
Company's (i) unaudited balance sheets as of October 31, 1995 (the "1995
Financial Statements") and October 31, 1996 (the "1996 Financial Statements")
and the related unaudited statements of income and changes in stockholders'
equity for the respective fiscal year(s) then ended in each case restated as of
July 31, 1997 (collectively the "Annual Financial Statements"), (ii) unaudited
pro forma balance sheet of July 31, 1997 (the "1997 Balance Sheet") and its
statement of income dated July 31, 1997 for the nine (9) month period then
ended, a copy of which is attached hereto as Exhibit 2.6 (the "Interim Financial
Statements") (the Annual Financial Statements and the Interim Financial
Statements are sometimes hereinafter referred to collectively as the "Financial
Statements"). The Financial Statements have been prepared from, and are in
accordance with, the books and records of Company, and present fairly the
financial position, results of operations and changes in stockholders' equity of
Company as of the dates and for the periods indicated, in each case in
conformity with generally accepted accounting principles ("GAAP"), consistently
applied throughout the periods covered thereby. If the Financial Statements were
audited as of their respective dates and as of the Closing Date, such audit
would not reveal any material adverse change in the Assets or the Business of
the Company not reflected therein. Seller shall, upon request by Buyer or its
representatives, cause Company, Seller or its employees to provide
representation letters and information related thereto in order to complete such
audits. Except for the "Hub Contracts" identified in Schedule 2.10 (the "Hub
Contracts"), the Company has no liability or obligation of any nature
whatsoever, whether accrued, fixed, absolute, contingent or otherwise, other
than (i) current liabilities and obligations that have arisen in the ordinary
course of business which are not overdue in their terms; (ii) liabilities and
obligations reflected and adequately provided for on the 1997 Balance Sheet;
(iii) liabilities and obligations in the ordinary course of business of the
Company which alone or in the aggregate would not have a Material Adverse
Effect. The Company's disclosure letter sets forth a true and complete list of
all loss contingencies (within the meaning of Statement of Financial Accounting
Standards No. 5) (a "Loss Contingency") of the Company exceeding $5,000.00 in
the case of any single loss contingency or $25,000.00 in the case of all loss
contingencies.
Section 2.7. Absence of Certain Changes, Undisclosed Liabilities.
(a) Except as disclosed on Schedule 2.7(a), since the dates of the Interim
Financial Statements, (i) the Company has operated in the ordinary course
consistent with past practice, (ii)
<PAGE> 9
there has been no Material Adverse Change, and (iii) there has been no event or
circumstance which could reasonably result in a Material Adverse Change to the
Company.
(b) Since the date of the 1997 Balance Sheet, the Company has not: (i)
suffered any physical damages, destruction or casualty loss; (ii) incurred,
created, assumed or guaranteed any liability or obligation of any nature, except
current liabilities in the ordinary course of business; (iii) increased, or made
any change in the method of calculating any bad debt, contingency or other
reserves; (iv) made any change in any method of accounting or keeping its books
of account or accounting practices or systems of internal accounting control;
(v) permitted or allowed any of its assets to be subjected to any mortgage,
pledge, liens, security interest or encumbrance of any kind except as arising in
the ordinary course of business by operation of law; (vi) canceled or waived any
claims or rights or sold transferred, distributed or otherwise disposed of any
assets or properties (other than its rights and interests in or under the
Service Contracts and Joint Venture Agreements) except in the ordinary and
regular course of business; (vii) except for the Fluor Inter-Company
Transactions and for contracts listed on Schedule 2.10 made any commitments
which in the aggregate exceed $25,000.00; or (viii) declared, paid or set aside
for payment any dividend or distribution with respect to its capital stock, or
redeemed, purchased or otherwise acquired any shares of its capital stock or any
derivative instrument thereof or authorized the creation or issuance of or
issued, sold or committed to sell any shares of capital stock.
Section 2.8. Legal Proceedings. There is no Litigation pending or, to the
Seller's or Company's best knowledge, threatened against Company or its
officers, directors, shareholders, agents or employees.
Section 2.9. Compliance with Law. Company has all material authorizations,
approvals, licenses and orders of and from all governmental and regulatory
officers and bodies necessary to carry on its business as it is currently being
conducted, to own or hold under lease the properties and assets it owns or holds
under lease and to perform all of its obligations under the agreements to which
it is a party, and Company has been and is in compliance with all applicable
laws, regulations and administrative orders of any country, state or
municipality or of any subdivision of any thereof to which its business and its
employment of labor or its use or occupancy of properties or any part thereof
are subject, except where the failure to be in compliance could not reasonably
be expected to have a Material Adverse Effect on the Company. No notice has been
received from any governmental authority with respect to any failure or alleged
failure of Company to be in compliance with any authorization, approval, license
or order.
Section 2.10. Material Contract
(a) Description.
(i) Personal Property. Schedule 2.10(a)(i) is a list or brief
description of all Contracts affecting or relating to the
personal property of Company (other than Hub Contracts and
Contracts affecting rights in the personal property of Company
which do not involve the payment by Company of more than
$5,000.00 per year).
<PAGE> 10
(ii) Purchase Orders. Schedule 2.10(a)(ii) is a list of all
outstanding Contracts for the acquisition of goods, Assets or
services (other than purchase orders and other commitments which
do not exceed $5,000.00 each).
(iii) Sales. Schedule 2.10(a)(iii) is a list of all Contracts for the
sale of products or the performance of services by Company which
exceed $5,000.00 each (other than agreements under which Company
agreed to load supplier content into catalog format).
(iv) Employment; Other Affiliate Contracts. Schedule 2.10(a)(iv)
contains a list of all Contracts with any employee, officer,
agent, consultant, sales representative, distributor, dealer or
affiliate of Company (other than those entered into in the
ordinary course of business consistent with past practice that
are immediately terminable at will by Company without any
liability).
(v) Marketing Rights. Other than the "Hub Contracts" and Rapids LLP,
the Company has not granted, transferred or assigned any right or
interest in the Proprietary Software (as defined below) to any
Person. Except as set forth in Schedule 2.10(a)(v), there are no
contracts, agreements, licenses or other commitments or
arrangements in effect with respect to the marketing,
distribution, licensing or promotion of the Proprietary Software
by any independent sales person, distributor, dealer,
sub-licenser or other remarketer or sales organization.
(vi) Other Contracts. Schedule 2.10(a)(vi) is a list of any other
Contracts of Company that (A) provide for payments in any
calendar year which exceed $5,000.00, (B) require performance by
Company of any obligation for a period of time extending beyond
two months from the Closing Date or (C) which are not terminable
by Company without penalty upon sixty (60) days or less notice.
(b) Copies. Correct and complete copies of all written Contracts, and
correct and complete descriptions of all oral Contracts to provide goods and
services in excess of $1,000 referred to in Section 2.10(a) have been made
available to Buyer.
(c) No Default. Except as set forth on Schedule 2.10(c), neither Company
nor, to Company's or Seller's knowledge, any other party is in default under any
of the Contracts referred to in Section 2.10(a) and neither Company nor Seller
has any knowledge of any basis for any such Default.
(d) Assurances. Each of the Contracts referred to in this Section 2.10 is
in full force and effect and, assuming due authorization, execution and delivery
by the other respective party thereto, constitutes a valid, legal and binding
agreement of the parties thereto, enforceable in accordance with its terms. The
continuation, validity and effectiveness of each of the Contracts referred to in
this Section 2.10, other than the Service Contracts and the Joint Venture
Agreements, will not be affected in any way by the consummation of the
transactions contemplated by this Agreement.
<PAGE> 11
(e) Continued Operations. The Contracts, taken as a whole, constitute all
of the contracts necessary for Buyer to continue to operate the Company after
the Closing in a manner substantially similar with the Company's operations
prior to the Closing except for operations incidental or pertaining to the
Service Contracts and Joint Venture Agreements.
(f) General. Except for the Contracts listed on Schedule 2.10(a)(v),
Company is not a party to or subject to (i) any joint venture contract or
arrangement or any other agreement which has involved or is expected to involve
a sharing of profits, (ii) any OEM, reseller, distribution or equivalent
agreement, volume purchase agreement, corporate end user license, sales or
service agreement or other agreement or contract pursuant to which Company has
granted most favored nation pricing provisions or exclusive marketing,
reproduction, publishing, licensing or distribution rights related to any
product, group of products or territory, or (iii) any agreement or contract
containing a covenant or provision purporting to limit Company's freedom to
compete or transact business in any line of business or in any geographic area.
Section 2.11. Premises. Company owns no real property. The Lease attached
hereto as Exhibit 4.13 contains a correct and complete description of all of
Company's leased real property (the "Premises"), and upon the execution and
delivery thereof will constitute the only Contract of the Company in effect on
the Closing Date relating to leased real property.
Section 2.12. Tax Returns; Taxes. All federal, state, local and foreign tax
returns required to be filed by or with respect to Company (including employment
and withholding tax returns) (collectively, "Taxes") have been filed. All Taxes
which are due and payable pursuant to such returns or for periods ending through
and including the Closing Date or pursuant to any assessment with respect to
Taxes in such jurisdictions, whether or not in connection with such returns have
been paid or adequate provisions therefore have been made on the books and
records of the Company. There is no liability for unpaid Taxes, whether or not
disputed, for the period ended July 31, 1997 and for all years and periods ended
prior thereto. All deficiencies asserted as a result of any examinations by the
IRS or any other taxing authority have been paid, fully settled or adequately
provided for in the 1997 Balance Sheet. There are no pending claims asserted for
Taxes of Company or outstanding agreements or waivers extending the statutory
period of limitation applicable to any tax return of Company for any period.
There are no Liens on or attaching to the Assets for any Taxes (other than any
Lien for current ad valorem taxes not yet due and payable).
Section 2.13. Labor Matters. Schedule 2.13 contains a correct and complete
list of all employees of and contractors performing work for the Company. Except
as disclosed on Schedule 2.13, the employment of all employees of Company is
terminable at will by Company without any liability. At or immediately prior to
the Closing Date, Company has paid to its employees all amounts incurred prior
to the Closing Date for wages, bonuses, vacation pay, sick leave or any
severance obligations. Company is not a party to any union agreement or
collective bargaining agreement applicable to any of its employees, and no
attempt to organize any of the Company employees has been made, proposed or
threatened. No strike, dispute, slowdown, stoppage or lockout is pending or
threatened against or affecting Company, nor has any such action ever been
threatened.
<PAGE> 12
Section 2.14. Employee Benefit Plans.
(a) Schedule 2.14 describes all Employee Benefit Plans of or applicable to
employees of Company, excluding temporary employees and independent contractors.
No Employee Benefit Plan is or has been a multiemployer plan within the meaning
of Section 3(37) of ERISA.
(b) All such Employee Benefit Plans are in compliance with the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and all other
applicable laws and collective bargaining agreements; and all reports and
returns required to have been made or filed in connection therewith have been
made or filed on a timely basis.
(c) The Company's employees do not participate in, and have not
participated in, any Employee Benefit Plan of Company or Seller which is subject
to Title IV of ERISA.
(d) The account balances of the Company's employee participants in the
ERISA Plans of Company or Seller are fully funded.
(e) Except as disclosed on Schedule 2.14, the consummation of the
transactions contemplated by this Agreement will not (i) entitle any current or
former employee of Company to severance pay, unemployment compensation or any
payment contingent upon a change in control or ownership of Company, or (ii)
accelerate the time of payment or vesting, or increase the amount, of any
compensation due to any such employee or former employee, except for the
accelerated vesting of benefits under the Fluor Corporation Employees Retirement
Plan, which acceleration will not result in any increase in the Company's
obligation to contribute to such plan.
(f) Except for the Fluor Corporation Employees Retirement Plan and the
Salaried Employees Savings Investment Plan, Company does not sponsor or
participate in Employee Benefit Plan which meets the requirements of Section
401(a) of the Code and in which the Company's employees are or have been
participants (each a "Section 401 Plan"). Following the Closing Date, employees
of Company who are plan participants in such retirement and investment plans
will have the right to transfer vested account balances to individual retirement
accounts or qualified plans, including any plan of Buyer which meets the
requirements of Section 401(a) of the Code (a "Buyer Plan"). "ERISA Affiliate"
shall mean any trade or business (whether incorporated or unincorporated, which
is a member of a group described in section 414(b), (c), (m) or (o) of the Code,
of which Seller is also a member.
(g) Buyer will not incur any liabilities or obligation of Seller arising
out of or incurred in connection with the operation and administration of any
Employee Benefit Plan or program sponsored by Seller or/and ERISA Affiliate or
to which Seller or/and ERISA Affiliate is or was obligated to make
contributions, including, without limitation, those set forth on Schedule 2.14
in which Company employees participated.
(h) As of the date of execution of this Agreement, Company and each ERISA
Affiliate has made, on account of each Company employee, full and timely payment
of all amounts required to be contributed under the terms of each Benefit Plan
and applicable law or required to be paid as expenses under such Benefit Plan,
and no excise taxes are assessable
<PAGE> 13
against Company as a result of any nondeductible or other contributions made or
not made to a Benefit Plan.
Section 2.15. Labor Relations. Company is in material compliance with all
federal and state laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, and is not engaged in any unfair
labor or unlawful employment practice. There is no (i) unlawful employment
practice discrimination charge involving Company pending before or, to the
knowledge of the Company and Seller, threatened involving the Equal Employment
Opportunity Commission ("EEOC"), EEOC recognized state "referral agency," or any
other governmental agency; or (ii) unfair labor practice charge or complaint
against Company pending before or, to the knowledge of the Company and Seller,
threatened involving the National Labor Relations Board ("NLRB").
Section 2.16. Insurance. All of the assets and the operations of the
Company of an insurable nature are insured through policies maintained by Parent
in such amounts and against such losses, casualties or risks as is usual for
Parent and its subsidiaries, taking into account self-insurance , including
coverage for errors and omissions and products liability relating to use and
operation of the Software. Company is not in Default under any of its insurance
policies or insurance policies under which it is covered, there are currently no
claims pending or asserted under any of these policies relating to the products
or services of Company, and Company has not been refused any insurance coverage.
Section 2.17. Title to Properties and Related Matters.
(a) Company has good and valid title to all of the properties listed in the
1997 Balance Sheet or acquired thereafter, free and clear of any and all Liens.
Except for customary terms contained in licenses of third party software and
other intellectual property licensed to Company under effective licenses in the
ordinary course of its business, no agreement concerning or restricting the sale
of any of its properties is in effect, and no other Person has any right or
option to acquire the any of its properties.
(b) Each item of Company's personal property is in good condition and
repair, reasonable wear and tear excepted, and is usable and adequate for its
present and intended use. The property listed in the 1997 Balance Sheet or
acquired thereafter includes all assets required to operate the Company as
currently conducted.
Section 2.18. Environmental Matters. To the knowledge of each of Company
and Seller, Company is in compliance in all material respects with all statutes,
regulations and ordinances relating to the protection of human health and the
environment including, without limitation, the Clean Water Act, 33 U.S.C. ss.
1251 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et
seq., the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Toxic Substances
Control Act, 15 U.S.C. ss. 2601 et seq., the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. ss. 1001 et seq., Occupational Safety and Health
Act, 29 U.S.C. ss. 651 et seq. the regulations developed pursuant to these
statutes and the corresponding state and local statutes, ordinances and
regulations. There has been no release by Company or, to the knowledge of
Company or Seller, by any other person of a hazardous substance as that term is
defined in the Comprehensive Environmental Response, Compensation and Liability
Act of
<PAGE> 14
1980, 42 U.S.C. ss. 9601(14), into the environment at any of Company's Premises
including, without limitation, any such release in the soil or groundwater
underlying the Premises which required any action or response (including
notification to any governmental agency) by Company or which could reasonably
expected to expose the Company to any liability. To the knowledge of Company and
Seller, there is no friable asbestos located on the premises. There is no
material containing polychlorinated biphenyls at levels of 50 parts per million
or higher located at the premises. There have been no releases of materials
stored in underground storage tanks, including, without limitation, petroleum or
petroleum-based materials. Company has received no notice and Seller has not
received on Company's behalf any notice of any violation of any environmental
statute or regulation nor has it been advised of any claim or liability pursuant
to any environmental statute or regulation brought by any governmental agency or
private party (in each case, an "Environmental Notice").
Section 2.19. Trademarks, Trade Names. Schedule 2.19 sets forth a true and
complete list of (i) all trademarks, trade names, service marks and registered
copyrights (including all international, federal and state filings and
registrations pertaining thereto appropriately noted on such Schedule) of or
owned by Company and used in the conduct of its business (collectively, the
"Proprietary Intellectual Property") and (ii) all trademarks, trade names,
copyrights, technology and processes used by Company which are material to its
business and are used pursuant to a license or other right granted by a third
party (collectively, the "Licensed Intellectual Property," and together with the
Proprietary Intellectual Property, referred to as "Intellectual Property"). The
Company does not own any patents. To the knowledge of the Company and Seller,
each of the federal, state and other governmental registrations with any country
pertaining to the Proprietary Intellectual Property is valid and in full force
and effect. Except as set forth in Schedule 2.19, Company owns, or has the right
to use pursuant to valid and effective agreements, all Intellectual Property,
and has the right to retain such ownership or right to use rights upon
consummation of the transactions contemplated, and the consummation of the
transactions contemplated hereby will not materially adversely alter or impair
any such rights. No claims are pending against Company, and Company and Seller
are not aware of any factual basis for such a claim, by any person with respect
to the Company's rights in any Intellectual Property or challenging or
questioning the validity or effectiveness of any license or agreement relating
to the same, that would be likely to result in a Material Adverse Effect; and
the current use by Company of the Intellectual Property does not in any material
respect illegally infringe upon the rights of any third party, including but not
limited to any copyright, patent, trade secret, trademark, service mark, trade
name, firm name, trade dress, mask work, other intellectual property right,
right of privacy or right in personal data of any person. Schedule 2.19 further
sets forth a list of all jurisdictions in which Company is operating under a
trade name and each jurisdiction in which any such trade name is registered.
Section 2.20. Company's Computer Software and Hardware.
(a) Schedule 2.20(a) sets forth a true and complete list of: (i) all
software and associated documentation owned by Company material to its
operations, other than custom-developed software developed for and assigned to a
customer (the "Proprietary Software"); and (ii) all software (other than the
Proprietary Software and "shrink-wrap" software) used in connection with the
Business (the "Licensed Software," and together with the Proprietary Software,
the "Software"). Company is in possession of all technical and descriptive
materials
<PAGE> 15
necessary to run its business in accordance with its historical practices.
Seller represents and warrants that the Proprietary Software consists of: (i)
source and object code embodied in magnetic media; and (ii) all development and
procedural tools, documentation, and manuals necessary to maintain, enhance,
develop derivative works, support and service the Proprietary Software as it is
currently configured, including licenses to use compilers, assemblers, libraries
and other aids. No parties other than Company possess any current or contingent
rights to any source code for the Proprietary Software.
(b) Company has a valid right, title and interest in and to all
intellectual property rights in the Proprietary Software, including all
copyrights (registered and unregistered), trade secrets, and proprietary and
confidential information rights therein. Except as set forth in Schedule
2.20(b), Company has developed the Proprietary Software entirely through its own
efforts for its own account or has acquired prior to the date hereof valid
right, title and interest in the Proprietary Software, and the Proprietary
Software is free and clear of all Liens, claims and encumbrances. Schedule
2.20(b) lists all parties other than employees of company who have created any
portion of, or otherwise have any rights in or to, the Proprietary Software.
Except as set forth in Schedule 2.20 (b), Company has secured from all parties
who have created any portion of, or otherwise have any rights in or to, the
Proprietary Software valid and enforceable written assignments of any such work
or other rights to Company and has provided true and complete copies of such
assignments to Buyer. The Company's use of the Licensed Software and the
Company's use and distribution of the Proprietary Software prior to Closing does
not breach any terms of any contract between Company and any third party. To the
knowledge of the Company and Seller, Company has been granted under the license
agreements relating to the Licensed Software (the "License Agreements") valid
and subsisting legal rights with respect to all software comprising the Licensed
Software necessary to conduct its business and such rights may be exercised in
any jurisdiction in which Company currently conducts its business Company is in
compliance with each of the terms and conditions of each of the License
Agreements, except to the extent failure to so comply, individually or in the
aggregate, would not have a Material Adverse Effect. To the knowledge of the
Company and Seller in the case of any commercially available "shrink-wrap"
software programs (such as Word or Excel), Company is not using any unauthorized
copies of any such software programs and, to the knowledge of Company and
Seller, none of the employees, agents or representatives of Company are using
any such unauthorized copies in a manner that would result in any liability to
Company.
(c) The Proprietary Software and, to the knowledge of Company and Seller,
the Licensed Software does not infringe the patent, copyright, or trade secret
rights or any other intellectual property or legal right of any third party
anywhere in the world.
(d) Company has granted no rights in the Software to any third party except
for rights granted to customers in the ordinary course of business pursuant to
contracts.
(e) To the knowledge of the Company and Seller, the Software and the
related computer hardware used by Company in its operations (the "Hardware") are
adequate in all material respects, when taken together with the other assets,
resources and personnel of Company, to run the Business of Company in the same
manner as such Business has operated since December 31, 1996.
Section 2.21. Transactions with Affiliates. Except for Parent and its
subsidiaries, no officer, director or holder of 5% or more of the outstanding
capital stock of Company, or any
<PAGE> 16
Person or affiliated group with whom any such stockholder, officer or director
has any direct or indirect relation by blood, marriage or adoption, or any
entity in which any such Person owns (other than through a publicly held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market and less than one percent (1%) of the stock of which is
beneficially owned by all such persons) any beneficial interest in: (i) any
Contract, arrangement or understanding or any related series of the same
involving aggregate consideration in excess of $5,000 with, or relating to, the
business or operations of Company; (ii) any loan, arrangement, understanding,
agreement or contract or any related series of the same for or relating to
indebtedness of Company in excess of $5,000 in the aggregate; or (iii) any
property or related group of properties with an aggregate value of at least
$5,000 (real, personal or mixed), tangible or intangible, used or currently
intended to be used in, the business or operations of Company.
Section 2.22. Brokers, Finders and Investment Bankers. No finder or any
agent, broker, or other Person acting pursuant to Company's or Seller's
authority or the authority of any affiliate of Company or Seller is entitled to
or has claimed any commission or finder's fee in connection with the
transactions contemplated by this Agreement.
Section 2.23. Customers. Schedule 2.23 is a list of the top twelve
customers of Company, plus any other customer or group of related customers from
whom payments were received which equaled or exceeded five percent (5%) of
Company's gross sales for the fiscal years ended 1995 and 1996, or from whom
payments are projected to equal or exceed such percentage for the current fiscal
year (the "Large Customers"). Except as set forth on Schedule 2.23, the
relationships of Company with its Large Customers are good commercial working
relationships, and neither Company nor Seller has any knowledge that any of the
Large Customers intends to terminate or otherwise modify adversely its
relationship with Company or to materially decrease its purchases of goods or
services from Company.
Section 2.24. Investment Company; Holding Company. Neither the Company nor
any of its stockholders or affiliates is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company," a "subsidiary company"
of a "holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 2.25. Certain Payments. Neither the Company nor to the best
knowledge of the Company, any person or other entity acting on behalf of the
Company has, directly or indirectly, on behalf of or with respect to the
Company: (i) made an unreported political contribution, (ii) made or received
any payment which was not legal to make or receive, (iii) engaged in any
transaction or made or received any payment which was not properly recorded on
the books of the Company, or (iv) engaged in any conduct constituting a
violation of the Foreign Corrupt Practices Act of 1977.
Section 2.26. Millennium Compliance.
Seller warrants that the Proprietary Software is "Millennium Compliant."
For the purposes of this Agreement "Millennium Compliant" means:
<PAGE> 17
(i) the functions, calculations, and other computing processes of the
Proprietary Software (collectively, "Processes") perform in a consistent manner
regardless of the date in time on which the Processes are actually performed and
regardless of the date input to the Proprietary Software, whether before, on, or
after January 1, 2000 and whether or not the dates are affected by leap years;
(ii) the Proprietary Software accepts, calculates, compares, sorts,
extracts, sequences, and otherwise processes date inputs and date values, and
returns and displays date values, in a consistent manner regardless of the dates
used, whether before, on, or after January 1, 2000;
(iii) the Proprietary Software will function without interruptions caused
by the date in time on which the Processes are actually performed or by the date
input to the Proprietary Software, whether before, on, or after January 1, 2000;
(iv) the Proprietary Software accepts and responds to two-digit year-date
input in a manner that resolves any ambiguities as to the century in a defined,
predetermined, and appropriate manner; and
(v) the Proprietary Software stores and displays date information in ways
that are unambiguous as to the determination of the century.
Section 2.27. Receivables. All receivables of Company, whether reflected on
the 1997 Balance Sheet or otherwise, represents sales actually made in the
ordinary course of business and are current and fully collectable net of any
reserves shown on the 1997 Balance Sheet within 60 days of the applicable
invoice dates. Seller has delivered a complete and accurate aging list of all
receivables of Company.
Section 2.28. Disclosure. No representation, warranty or covenant made or
furnished by Company or Seller in or pursuant to this Agreement, the Schedules
or Exhibits attached hereto, or the Other Agreements when taken together with
all such related representation, warranties and covenants relating to such
disclosure, contains or shall contain an untrue statement of a material fact or
omits or shall omit a material fact required to be stated herein or therein or
necessary to make the statements contained herein or therein not misleading.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that:
Section 3.1. Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia, and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. Buyer is duly
qualified to transact business, and is in good standing, as a foreign
corporation in each jurisdiction where the character of its activities requires
such qualification, except where the failure to so qualify would not have a
Material Adverse Effect. Buyer has delivered to Company true, correct and
complete copies of its Articles of Incorporation and Bylaws, as currently in
effect.
<PAGE> 18
Section 3.2. Authorization. Buyer has full corporate power and authority to
execute and deliver this Agreement and the Other Agreements and to perform its
obligations under this Agreement and the Other Agreements and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Other Agreements by Buyer, the performance by Buyer of its
respective obligations hereunder and thereunder and the consummation of the
transactions provided for herein and therein have been duly and validly
authorized by all necessary corporate action. This Agreement constitutes, and
when executed and delivered, the Other Agreements will constitute, the legal,
valid and binding obligations of Buyer, enforceable against it in accordance
with the terms hereof and thereof.
Section 3.3. Absence of Restrictions and Conflicts. The execution, delivery
and performance of this Agreement and the Other Agreements, the consummation of
the transactions contemplated hereby and thereby and the fulfillment of and
compliance with the terms and conditions of this Agreement and the Other
Agreements do not and will not, with the passing of time or the giving of notice
or both, violate or conflict with, constitute a breach of or default under,
result in the loss of any material benefit under, or permit the acceleration of
any obligation under, (i) any term or provision of the Articles of Incorporation
or Bylaws of Buyer, (ii) any Contract to which it is a party, (iii) any
judgment, decree or order of any court or governmental authority or agency to
which Buyer is a party or by which Buyer or any of its properties is bound, or
(iv) any statute, law, regulation or rule applicable to Buyer, so as to have, in
the case of subsections (ii) through (iv) above, a Material Adverse Effect.
Section 3.4. Investment Representation. Buyer is acquiring the Shares from
Seller for the Buyer's own account, for investment purposes only and not with a
view to or for resale in connection with the distribution thereof.
ARTICLE 4.
POST-CLOSING COVENANTS AND ADDITIONAL AGREEMENTS OF
SELLER AND BUYER
Section 4.1. Confidentiality. All non-public information obtained by Buyer
or Seller or any of their representatives pursuant to this Agreement or in
connection with the matters contemplated hereby concerning the business,
operations or affairs of the other (including the Company) will be kept
confidential and will not be used for any purpose other than the consummation of
the transactions contemplated hereby, or be disclosed to any other person or
entity, except for such disclosure to its employees, agents and representatives
who have a need to know the same and who have been advised of the confidential
nature of such information and who agree to abide by the terms hereof and except
for such disclosure as may be required by applicable law, court order or
governmental agency request. The obligations of confidentiality hereunder shall
continue for a period of five years from the date of this Agreement, provided
that, with respect to any item provided hereunder which constitutes a trade
secret under applicable law, such period of confidentiality shall continue for
so long as such item constitutes a trade secret under applicable law.
Section 4.2. Employees; WARN Act Compliance. Seller understands,
acknowledges, and agrees that Buyer shall have no obligation to enter into or
continue any employment arrangements with any employee of Company on or after
the Closing Date. Seller shall
<PAGE> 19
indemnify Buyer for all loss suffered by Buyer as a result of claims brought by
Company employees on or after the Closing Date resulting from Company's
termination of such employees within the first thirty (30) days following the
Closing Date. Seller agrees to use its reasonable efforts to assist with the
employment of those employees of Company for which Buyer desires to enter into
employment arrangements. Seller shall take such actions as are necessary to
comply with the Worker Adjustment and Retraining Notification Act (29 U.S.C.
2101 et seq.) and any regulations adopted thereunder (collectively, "WARN") that
may be applicable to the transaction contemplated hereby.
Section 4.3. Reasonable Efforts; Further Assurances; Cooperation. At any
time and from time to time after the Closing, Seller shall, at the request and
expense of Buyer, take any and all actions and execute and deliver such
documents as may be necessary or reasonable to put Buyer in actual possession
and operating control of the Company and its assets, or to otherwise effectuate
or consummate any of the transactions contemplated hereby.
Section 4.4. Certain Tax Matters.
(a) Seller and Buyer agree to the joint filing of an election under code
Section 338(h)(10) and any corresponding elections under applicable Law with
respect to the purchase of the Shares.
(b) Seller shall use Buyer's allocation of the Purchase Price for purposes
of the Section 338 election, pursuant to Section 338(h)(10) of the Code and
regulations thereunder. Seller and Buyer will file all tax returns in a manner
consistent with such allocations.
(c) Seller shall pay any taxes attributable to the making of the 338(h)(10)
election under the Code and the consummation of the transactions as herein
provided and shall indemnify Buyer and Company from and against any such taxes,
including without limitation, interest and penalties arising out of such taxes.
(d) Seller shall pay taxes, and shall indemnify Buyer and Company from and
against any such taxes, including without limitation, interest and penalties
relating thereto, arising out of, in connection with or relating to the Tax
Indemnification Period under applicable state and local law with respect to the
purchase of the Shares hereunder due to the state or local taxing jurisdiction
(i) not recognizing Section 338(h)(10) or similar election under the Code, or
(ii) not applying its provisions corresponding to Section 338(h)(10) of the Code
to the purchase of the Shares hereunder. The "Tax Indemnification Period" for
purposes of this paragraph means the period of time to which the Buyer is
entitled to get indemnification pursuant to Section 6.2.
(e) In the case of any audit, examination or assessment with respect to
taxes for which Seller is or may be liable under this Agreement, Buyer shall
inform Seller in accordance with the provisions of Section 6.2. In connection
with any such matters, Buyer shall make available such information as Seller may
reasonably request or execute such documents as are reasonably necessary to
enable Seller to exercise any rights of defense or participation with respect to
such matters.
(f) Seller will include income or loss of the Company on its consolidated
federal income tax return for all periods through the Closing Date and pay any
federal income taxes
<PAGE> 20
attributable to such income. The Company will furnish information to the Seller
for inclusion in Seller's federal consolidated income tax return for the period
which includes the Closing Date. The income of the Company will be apportioned
to the period up to and including the Closing Date and the period after the
Closing Date by Closing the books of the Company as of the end of the Closing
Date.
(g) The parties agree that neither will take any action or permit
the occurrence of any transaction not in the ordinary course of business on the
Closing Date after the Closing. Notwithstanding the foregoing, if and to the
extent of the occurrence of a transaction which is not an occurrence in the
ordinary course which occurs on the Closing Date after the Closing, Buyer agrees
to report such transaction on Buyer's federal income tax return to the extent
permitted by Reg. ss. 1.1502-76(b)(1) and to indemnify Seller as to any
resulting additional tax owed by Seller.
Section 4.5. Additional Agreements. As soon as possible following the
Closing Date, Seller shall obtain signed agreements and such other documents as
may be reasonably requested by Buyer in form and substance reasonably
satisfactory to Buyer, providing for the assignment of all right, title, and
interest to all work product, works of authorship, and all intellectual property
and legal rights therein created or developed according to the engagements and
the distribution and license of the software as set forth in Exhibit 4.5. The
costs and expenses of obtaining such agreements and documents shall be borne by
Seller.
Section 4.6. Later Investment by Seller. Buyer agrees that for a period of
18 months after Closing Date, should Buyer restructure the Business so that the
Business is established as an entity with outside investors ("Newco"), Seller
shall have the option to acquire up to 20% of Newco on financial terms and
conditions the more favorable of (i) a transaction identical to the acquisition
of Company Shares by Buyer or (ii) those offered to unaffiliated investors.
Section 4.7. Use of Buyer's Software. Company and Seller have entered into
a license for the GETs software (the "GETs License") subject to the terms and
conditions contained therein for a period of 60 days. Except for the limited
license rights set forth in the GETs License, immediately following the Closing,
Seller shall have no other rights or interests of any kind in or to the
Proprietary Software or any of the Assets of the Company except assets
representing certain nonexclusive rights where Seller independent from Company
has the same non-exclusive rights or commercial information independently
available to the Seller.
Section 4.8. References; Suppliers. Seller shall provide upon reasonable
request by Buyer favorable references for the Company. In each of the three (3)
years following the Closing Date, Seller agrees to use its reasonable best
efforts to introduce a minimum of 200 suppliers to the Company for the purpose
of facilitating the Company's solicitation of such suppliers as content
providers.
Section 4.9. Noncompete and Nonsolicitation.
(a) Coverage. The parties hereto acknowledge and agree that the
Company is engaged in the Business in the United States, Canada, Europe and
South America (the "Territory"). Seller acknowledges to adequately protect the
interests of Buyer in the Company, it
<PAGE> 21
is essential that any noncompete and nonsolicitation covenant with respect to
the Company cover the Business, the Company and all Affiliates of the Seller in
the entire Territory.
(b) Seller Covenants. Seller hereby covenants and agrees that
Seller and its Affiliates shall not, in any manner for the five (5) years
following the Closing Date, directly or indirectly engage in, have any equity
(including, without limitation, equity, debt or derivative securities, options,
warrants or any similar interest convertible into an equity or debt security)
interest (other than passive investments in the publicly traded shares of a
company, which shares shall not represent more than five percent (5%) of all
such shares issued and outstanding) or profit interest in, any business which
engages in activities that compete with the products and services provided by
the Company or proposed to be provided by the Company to its customers as of the
date hereof (and any enhancements of such products and services) in the
Territory without the prior written consent of Buyer, which consent shall be
granted or withheld in Buyer's sole discretion.
(c) Employee Nonsolicitation. Seller hereby covenants and agrees
that, for a period of one (1) year after the Closing Date, neither Seller nor
any of its Affiliates shall in any manner, directly or indirectly, employ or
seek to employ on behalf of Seller or its Affiliates, or on behalf of any other
person, firm or corporation, any person who was an employee of or independent
contractor to the Company at the Closing Date who received an offer to continue
employment with the Company in connection with the transactions contemplated
hereunder or during the twelve (12) month period after the Closing Date, without
Buyer's prior written consent which may be given or withheld in Buyer's sole
discretion, provided, however, that the preceding provisions of this section
shall not be deemed to prohibit TRS Staffing Solution's employment of any such
person who is assigned to Company or who has made available for assignment to
Company (which assignment Company has declined).
Section 4.10. Dissolution of DAQ and RAPIDS. As promptly as possible
following Closing, Seller shall take all action reasonably required to dissolve
Duke/Acquion, LLC and RAPID, LLP. In connection therewith, Seller shall seek to
obtain from Duke Power and its affiliates and from NUS Information Services,
Inc. and its affiliates full and unconditional releases and waivers of
liability, in form and substance reasonably satisfactory to Buyer, on behalf of
Company and its affiliates, provided that failure to obtain such release shall
not expose Seller to any liability except to the extent that Seller is obligated
under Section 6.2 to indemnify Company or Buyer against claims. Seller shall be
responsible for all cost and expense in connection with such dissolutions. Buyer
shall cooperate with Seller and make Company's services available to
Duke/Acquion, LLC's customers existing on the Closing Date and to the parties
involved in developing the proposed RAPID 4.0 software on commercially
reasonable terms.
Section 4.11. Lease. Company and Seller shall have entered into a lease
with respect to office space in Greenville, South Carolina ("Lease") on terms
and conditions contained in the Lease attached hereto as Exhibit 4.11.
<PAGE> 22
Section 4.12. Employee Benefit Plans.
Seller and Buyer hereby covenant and agree as follows with regard to all
Employee Benefit Plans maintained by the Company:
(a) Benefit Plans. Seller and Buyer hereby covenant and agree that Buyer
shall have no liability for any benefits payable under any Benefit Plan
maintained by, or participated in, by the Company or its employees, as of the
Closing Date.
(b) Vacation. Seller hereby covenants and agrees that it will pay, or cause
Company to pay, all of Company's employees for such employees' accumulated
vacation time as of the Closing Date, whether labeled time off with pay,
vacation, sick time or otherwise, and that after the Closing, Buyer and Company
shall have no liability to any employees or former employees of Company for
vacation time accumulated on or prior to the Closing Date.
(c) Health Insurance. Seller hereby covenants and agrees that it will
promptly pay, or cause Company to pay, on or before the Closing Date, all
obligations that are payable with respect to Company's employees and their
dependents under any health insurance plan maintained by Company or Seller as of
the Closing Date. Seller further covenants and agrees to pay all health
insurance obligations with respect to health conditions of such employees or
dependents for which treatment is in progress as of the Closing Date, including,
without limitation, obligations with respect to the individuals listed on
Schedule 4.12(c), to the extent such obligations are due to the conditions
specified on Schedule 4.12(c), provided, in each case, that claims with respect
to such conditions have been made on or before, or within thirty (30) days
after, the Closing Date.
(d) Disability Insurance. Seller hereby covenants and agrees that it will
promptly pay all obligations that are payable under any disability plan
maintained by Company or Seller as of the Closing Date with respect to
disabilities claimed by Company's employees which are attributable to conditions
existing on or before the Closing Date, including, without limitation,
obligations with respect to the individuals listed on Schedule 4.12(d) provided,
claims with respect to such conditions have been made on or before, or within
thirty (30) days after, the Closing Date.
(e) Bonuses. Seller hereby covenants and agrees that it will pay all
bonuses earned by employees or former employees of Company as of the Closing
Date. Buyer shall have no liability for bonuses earned or expected as of the
Closing Date.
(f) COBRA and HIPAA. Seller hereby covenants and agrees that it will
promptly deliver to all employees of Company, and such employees' dependents,
appropriate notices and documentation under applicable provisions of the
Consolidated Budget Reconciliation Act of 1985 and the Health Insurance and
Portability and Accountability Act of 1996.
(g) Prior Service Credit for 401(k) and Employee Stock Purchase Plans. In
determining whether an employee of Company has met the waiting period
requirement for participation in Buyer's 401(k) plan or employee stock purchase
plan, Buyer hereby covenants and agrees to provide such employee with credit for
time employed by Company or Fluor Daniel, Inc. prior to the Closing Date.
<PAGE> 23
(h) Other Commitments to Pay Employee Benefits. Seller hereby acknowledges
that it is possible that the Company and/or Seller made commitments to employees
of Company to pay for or provide other employment-related benefits prior to the
Closing Date, but that such commitments have not been disclosed to Buyer, either
by Seller, the Company or the affected employees. In the event claims for such
benefits are asserted by employees of Company after the Closing Date, then to
the extent commitments to provide such benefits can be substantiated, the Seller
agrees and covenants promptly to indemnify Company against any liabilities it
may have with respect thereto.
(i) Termination of Employment of Certain Employees. The parties acknowledge
that prior to the Closing Date, Seller shall cause Company to terminate the
employment of certain of Company's employees, who are identified on Schedule
4.12(j), and Seller shall offer employment to such employees. Buyer reserves the
right to terminate the employment of any other Company employee as of the
Closing Date or thereafter. Seller covenants and agrees to indemnify and hold
Buyer harmless from and against any and all claims asserted by any such Company
employee whose employment is terminated prior to or within five (5) days
following the Closing Date and who asserts that his or her employment was
wrongfully terminated, whether by the assertion of the existence of a contract
of employment other than employment "at will" or by the assertion of claims of
breach of contract made by Company prior to or within five (5) days following
Closing or other claims which could have been asserted against Company prior to
the Closing Date. In addition, Buyer shall incur no liability for claims
asserted by persons who may have worked on the premises of Company or performed
services for Company prior to the Closing Date but who were not regular,
full-time employees of Acquion, Inc.
ARTICLE 5.
DELIVERIES AT CLOSING
Section 5.1. Deliveries by Seller. Seller has delivered or have caused to
be delivered to Buyer:
(a) Stock certificates evidencing all of the Shares, which certificates
have been duly endorsed in blank or have appropriate stock powers endorsed in
blank attached hereto, in proper form for transfer;
(b) True and correct copies of the Articles of Incorporation of the
Company, certified by the Secretary of State of the State of California as of a
date not less than seven business days preceding the Closing Date, and true and
correct copies of the Bylaws of the Company, certified as of the Closing Date by
the Secretary of Company;
(c) Good standing certificates relating to Seller and the Company from the
State of California and each other jurisdiction in which the Company is
qualified to conduct business;
(d) Letters of resignation effective at the Closing executed by the
officers and directors of the Company;
(e) Employment Agreement executed by Carl Falk, substantially in the form
attached hereto as Exhibit 5.1(e);
<PAGE> 24
(f) An opinion of counsel to Seller and the Company, substantially in the
form attached hereto as Exhibit 5.1(f) hereto;
(g) A Secretary's Certificate of the Seller attesting to the incumbency of
the officers executing this Agreement, resolutions authorizing the transaction
and other certificates and agreements delivered by Seller at Closing;
(h) The Lease executed by Company and Fluor Daniel, Inc.; (i) The GETs
License executed by Seller and Fluor Daniel, Inc.;
(j) A Bill of Sale in form and substance reasonably satisfactory to Buyer
attached as Exhibit 5.1(j) hereto evidencing transfer from Seller and its
affiliates to Company of the assets described in Exhibit 5.1(j); and
(k) Assignment of the Service Contracts of the Company from Company to
Seller in form and substance reasonably satisfactory to Buyer attached hereto as
Exhibit 5.1(k).
Section 5.2. Deliveries by Buyer. Buyer has delivered or caused to be
delivered to Seller:
(a) Good standing certificate relating to Buyer from the State of Georgia;
(b) Secretary's Certificate attesting to the incumbency of the officers
executing this Agreement, resolutions authorizing the transaction and the other
certificates and agreements delivered by Buyer at the Closing;
(c) Opinion of Buyer's Counsel; and
(d) The Purchase Price by wire transfer of immediately available funds.
Section 5.3. Assignment and Assumption Agreement. Seller does hereby assign
and delegate all of its interest, rights, duties and obligations in the assets,
contracts, documents and agreements of the Company, including, without
limitation, any rights of Seller in the Software but excluding the GETs License
or any rights thereunder.
ARTICLE 6.
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES AND INDEMNIFICATION
Section 6.1. Survival of Representations and Warranties.
(a) All representations, warranties, agreements and covenants made or
undertaken by the parties in this Agreement or the Other Agreements (i) are
material, have been relied upon by the other parties hereto, shall survive the
Closing hereunder, and shall not merge in the performance of any obligation by
any party hereto, (ii) shall terminate and expire (A) with respect to any
General Claim for which notice has not been given, on the two and one half year
anniversary of the Closing Date, and (B) with respect to any Tax Claim, on the
date upon which the liability to which any such Tax Claim may relate is barred
by all applicable statutes of limitation, and (iii) shall not terminate or
expire with respect to any Environmental Claim or any Ownership Claim. With
respect to each type of claim, the applicable "Claims Period" shall commence
immediately following the Closing and shall expire on the same day as the
underlying
<PAGE> 25
representation, warranty, agreement or covenant terminates or expires. As used
in this Agreement, the following terms have the following meanings:
(1) "General Claim" means any claim based upon, arising out of or
otherwise in respect of any inaccuracy in any representation or warranty or any
breach of any covenant or agreement made or to be performed by any party
pursuant to this Agreement or the Other Agreements, provided that a General
Claim shall not include any Tax Claim, Environmental Claim or Ownership Claim;
(2) "Tax Claim" means any claim based upon, arising out of or
otherwise in respect of any inaccuracy in any representation or warranty or any
breach of any covenant or agreement made or to be performed by Company or Seller
pursuant to this Agreement or the Other Agreements, related to any Taxes,
including, without limitation, those representations and warranties made in
Section 2.12 and any claim made under Section 4.4;
(3) "Environmental Claim" means any claim arising out of or otherwise
in respect of any inaccuracy in any representation or warranty made in Section
2.18, or any claim arising out of or otherwise in respect of the conditions or
occurrences described in Section 5.1(h); and
(4) "Ownership Claim" means any claim arising out of or in respect of
any inaccuracy in any representation or warranty made in Sections 2.4, 2.17, the
first two sentences of Section 2.20(b), and Section 2.20(c) or any claim arising
out of or otherwise in respect of a loss suffered in connection with Section
6.2(a)(iv).
(b) Seller acknowledges and agrees that no due diligence or other
investigation of Company by Buyer or its representatives will diminish or
obviate any of the representations, warranties, covenants or agreements made or
to be performed by Seller or the Company pursuant to this Agreement or the Other
Agreements or Buyer's right to fully rely upon such representations, warranties,
covenants and agreements.
Section 6.2. Indemnification by the Seller.
(a) Subject to the other provisions of this Agreement, Seller shall
indemnify and hold harmless Buyer and, if applicable, its subsidiaries and
affiliates, each of their respective officers, directors, employees, agents and
representatives, and each of the heirs, executors, successors and assigns of any
of the foregoing (collectively, the "Buyer Indemnified Parties"), from, against
and in respect of any and all claims, liabilities, obligations, losses, costs,
expenses, penalties, fines and other judgments (at equity or at law) and damages
whenever arising or incurred (including, without limitation, amounts paid in
settlement, reasonable attorneys' fees and expenses) arising out of or relating
to:
(i) any breach of the representations, warranties, covenants or
agreements made by Seller in the Agreement which survive Closing
pursuant to their terms of Section 6.1 of the Agreement;
(ii) any breach of the representations, warranties, covenants or
agreements made by Seller in any certificate, agreement, exhibit
or schedule (the "Seller Ancillary Documents") delivered by
Seller pursuant to this
<PAGE> 26
Agreement, which representation, warranty, covenant or agreement
survives Closing pursuant to their terms or Section 6.1 of this
Agreement;
(iii) any claims arising from goods provided, services rendered or
actions taken by the Company before the Closing Date or otherwise
arising from the operations or business of the Company as
conducted at any time before the Closing Date;
(iv) any loss incurred by Company or Buyer relating to, or arising
under, the Joint Venture Agreements;
(v) any claims now existing or hereafter arising from or related to
Company's use prior to Closing of catalogue content provided by
third parties in violation of the limited rights granted to the
Company by such third parties;
(vi) any fraud, willful misconduct, bad faith or intentional breach of
any representation, warranty, covenant or agreement made by
Seller in any Seller Ancillary Document.
The claims, liabilities, obligations, losses, costs, expenses, penalties,
fines, judgments and damages of the Buyer Indemnified Parties described in this
Section 6.2(a) as to which the Buyer Indemnified Parties are entitled to
indemnification are referred to as "Buyer Losses" in this Agreement.
(b) No Buyer Indemnified Party is entitled to make any claim for
indemnification under this Agreement after the appropriate Claims Period;
provided, however, that if prior to the close of business on the last day of the
Claims Period the Seller has been notified of a claim for indemnity under this
Agreement and such claim has not been finally resolved or disposed of at such
date, the basis for such claim shall continue to survive with respect to such
claim and shall remain a basis for indemnity under this Agreement with respect
to such claim until such claim is finally resolved or disposed of in accordance
with the terms of this Agreement; provided, further, however, that the Buyer
Indemnified Party and the Seller shall be obligated under this Agreement to
exercise reasonable efforts to resolve any such claim as quickly as is
reasonably practicable.
(c) Indemnification Procedure.
(i) Promptly after receipt by a Buyer Indemnified Party of notice by
a third party of any complaint or the commencement of any action
or proceeding with respect to which indemnification is being
sought under this Agreement, such Buyer Indemnified Party shall
notify the Seller of such complaint or of the commencement of
such action or proceeding; provided, however, that failure to so
notify the Seller shall not relieve the Seller from liability for
such claims except and only to the extent that such failure to
notify the Seller results in the forfeiture of, or otherwise
prejudices Seller's ability to establish, rights and defenses
otherwise available to the Seller
<PAGE> 27
with respect to such claim. The Seller shall have the right, upon
written notice to the Buyer Indemnified Party, to assume the
defense of such action or proceeding, including the employment of
counsel reasonably satisfactory to the Buyer Indemnified Party
and the payment of the fees and disbursements of such counsel as
incurred. If the Seller does not elect to assume control of the
defense of any such claims, the Seller shall be bound by the
results otherwise obtained with respect to such claim. In the
event, however, that the Seller declines or fails to assume the
defense of the action or proceeding or to employ counsel
reasonably satisfactory to such Buyer Indemnified Party, in
either case in a timely manner, then such Buyer Indemnified Party
may employ counsel to represent or defend it in any such action
or proceeding and the Seller shall pay the reasonable fees and
disbursements of such counsel upon receipt of an invoice;
provided, however, that the Seller shall not be required to pay
the fees and disbursements of more than one counsel for all Buyer
Indemnified Parties in any jurisdiction in any single action or
proceeding. In any action or proceeding with respect to which
indemnification is being sought under this Agreement, the Buyer
Indemnified Parties or the Seller, whichever is not assuming the
defense of such action, shall have the right to participate in
such litigation and to retain its own counsel at such party's own
expense. The Buyer Indemnified Parties or the Seller, as the case
may be, shall at all times use reasonable efforts to keep the
Seller or the Buyer Indemnified Parties, as the case may be,
reasonably apprised of the status of the defense of any claim the
defense of which they are maintaining, and to cooperate in good
faith with each other with respect to the defense of any such
action.
(ii) No Buyer Indemnified Party may settle or compromise any claim or
consent to the entry of any judgment with respect to which
indemnification is being sought from the Seller under this
Agreement without the prior written consent of the Seller, unless
such settlement, compromise or consent includes an unconditional
release of the Seller from all liability arising out of such
claim and does not contain any equitable order, judgment or term
which affects, restrains or interferes with the business of
Seller. Seller shall not, without the prior written consent of
Buyer, settle or compromise any claim or consent to the entry of
any judgment with respect to which indemnification is being
sought under this Agreement unless such settlement, compromise or
consent includes an unconditional release of the Buyer
Indemnified Parties from all liability arising out of such claim
and does not contain any equitable order, judgment or term which
in any manner affects, restrains or interferes with the business
of Buyer, any of the Buyer Indemnified Parties or any of their
respective affiliates.
<PAGE> 28
(iii) In the event that a Buyer Indemnified Party does claim a right
to payment pursuant to this Agreement, such Buyer Indemnified
Party shall send written notice of such claim to Seller. Such
notice shall specify the basis for such claim. As promptly as
possible after the Buyer Indemnified Party has given such notice,
such Buyer Indemnified Party and the Seller shall establish the
merits and amount of such claim (by mutual agreement, litigation,
arbitration, mediation or otherwise) and, within five (5)
business days of the final determination of the merits and amount
of such claim, the Seller shall deliver to the Buyer Indemnified
Party an amount of cash in immediately available funds in either
case in an amount sufficient to satisfy and discharge in full
such claim as so determined.
(d) In the event Seller is required to indemnify Buyer under this Section
6.2 as a result of any of the receivables of Company not being collectable as
contemplated by Section 2.27, Buyer, upon payment of such indemnification, shall
cause Company to assign such uncollected receivable to Seller.
Section 6.3. Indemnification by Buyer.
(a) Subject to the other provisions of this Agreement, Buyer shall
indemnify and hold harmless Seller and, if applicable, its subsidiaries and
affiliates, each of their respective officers, directors, employees, agents and
representatives and each of their heirs, executors, successors and assigns
(collectively, the "Seller Indemnified Parties"), from, against and in respect
of any and all claims, liabilities, obligations, losses, costs, expenses,
penalties, fines and other judgments (at equity or at law) and damages whenever
arising or incurred (including, without limitation, amounts paid in settlement,
costs of investigation and reasonable attorneys' fees and expenses) arising out
of or relating to:
(i) any breach of the representations, warranties, covenants or
agreements made by Buyer in this Agreement which survives Closing
pursuant to its terms or Section 6.1 of this Agreement;
(ii) any breach of the representations, warranties, covenants or
agreements made by Buyer in any certificate, agreement, exhibit
or schedule (the "Buyer Ancillary Documents") delivered by Buyer
pursuant to this Agreement, which representation, warranty,
covenant or agreement survives Closing pursuant to its terms or
Section 6.1 of this Agreement;
(iii) unless a breach of a representation or warranty contained in
Article 2, any claim arising from goods provided, services
rendered or actions taken by the Company after the Closing Date
or otherwise arising from the operations or business of the
Company as conducted any time after the Closing Date;
<PAGE> 29
(iv) any fraud, willful misconduct, bad faith or intentional breach of
any representation, warranty, covenant or agreement made by Buyer
in any Buyer Ancillary Document.
The claims, liabilities, obligations, losses, costs, expenses, penalties,
fines, judgments and damages of the Seller Indemnified Parties described in this
Section 6.3(a) as to which the Seller Indemnified Parties are entitled to
indemnification are referred to as "Seller Losses" in this Agreement.
(b) No Seller Indemnified Party is entitled to make any claim for
indemnification under this Agreement after the appropriate Claims Period;
provided, however, that if prior to the close of business on the last day of the
Claims Period, Buyer has been notified of a claim for indemnity under this
Agreement and such claim has not been finally resolved or disposed of at such
date, the basis for such claim shall continue to survive with respect to such
claim and shall remain a basis for indemnity under this Agreement with respect
to such claim until such claim is finally resolved or disposed of in accordance
with the terms of this Agreement; provided, further, however, that the Seller
Indemnified Party and Buyer shall be obligated under this Agreement to exercise
reasonable efforts to resolve any such claim as quickly as is reasonably
practicable.
(c) Indemnification Procedure.
i) Promptly after receipt by a Seller Indemnified Party of notice by
a third party of any complaint or the commencement of any action
or proceeding with respect to which indemnification is being
sought under this Agreement, such Seller Indemnified Party shall
notify Buyer of such complaint or of the commencement of such
action or proceeding; provided, however, that failure to so
notify Buyer does not relieve Buyer from liability for such claim
except and only to the extent that such failure to notify Buyer
results in the forfeiture of, or otherwise prejudices Buyer's or
any of its affiliates ability to establish rights and defenses
otherwise available to Buyer or any of its affiliates with
respect to such claim. Buyer will have the right, upon written
notice to the Seller Indemnified Party, to assume the defense of
such action or proceeding, including the employment of counsel
reasonably satisfactory to the Seller Indemnified Party and the
payment of the reasonable fees and disbursements of such counsel
as incurred. If Buyer does not elect to assume control of the
defense of any such claims, Buyer shall be bound by the results
otherwise obtained with respect to such claim. In the event,
however, that Buyer declines or fails to assume the defense of
the action or proceeding or to employ counsel reasonably
satisfactory to such Seller Indemnified Party, in either case in
a timely manner, then such Seller Indemnified Party may employ
counsel to represent or defend it in any such action or
proceeding and Buyer shall pay the reasonable fees and
disbursements of such counsel as incurred; provided, however,
that Buyer is not required to pay the fees and disbursements of
more
<PAGE> 30
than one counsel for all Seller Indemnified Parties in any
jurisdiction in any single action or proceeding. In any action or
proceeding with respect to which indemnification is being sought
under this Agreement, the Seller Indemnified Parties or Buyer,
whichever is not assuming the defense of such action, shall have
the right to participate in such litigation and to retain its own
counsel at such party's own expense. The Seller Indemnified
Parties or Buyer, as the case may be, shall at all times use
reasonable efforts to keep Buyer or the Seller Indemnified
Parties, as the case may be, reasonably apprised of the status of
the defense of any claim the defense of which they are
maintaining and to cooperate in good faith with each other with
respect to the defense of any such action.
No Seller Indemnified Party may settle or compromise any claim or
consent to the entry of any judgment with respect to which
indemnification is being sought from Buyer under this Agreement
without the prior written consent of Buyer, unless such
settlement, compromise or consent includes an unconditional
release of Buyer and its affiliates from all liability arising
out of such claim and does not contain any equitable order,
judgment or term which in any manner affects, restrains or
interferes with the business of Buyer, any of the Buyer
Indemnified Parties or any of their respective affiliates. Buyer
shall not, without the prior written consent of each of the
Seller, settle or compromise any claim or consent to the entry of
any judgment with respect to which indemnification is being
sought under this Agreement unless such settlement, compromise or
consent includes an unconditional release of the Seller
Indemnified Party from all liability arising out of such claim
and does not contain any equitable order, judgment or term which
in any material manner affects, restrains or interferes with the
business of the Seller Indemnified Parties or any of their
respective affiliates.
iii) In the event that a Seller Indemnified Party does claim a right
to payment pursuant to this Agreement, such Seller Indemnified
Party shall send written notice of such claim to Buyer. Such
notice shall specify the basis for such claim. As promptly as
possible after such Seller Indemnified Party has given such
notice, the Seller and Buyer shall establish the merits and
amount of such claim (by mutual agreement, litigation,
arbitration, mediation or otherwise) and, within five (5)
business days of the final determination of the merits and amount
of such claim, Buyer shall deliver an amount of cash in
immediately available funds to such Seller Indemnified Party as
appropriate to satisfy and discharge such claim as so determined.
<PAGE> 31
Section 6.4. Liability Limits; Waiver of Consequential Damages.
(a) The Seller shall only be liable for Buyer Losses arising under this
Agreement solely to the extent that any such Buyer Losses exceed, in the
aggregate, $10,000.00 (the "Seller Basket Amount"); provided, however, that
Buyer Losses arising under or pursuant to (i) Section 6.2(a)(i) of this
Agreement shall not be subject to the Seller Basket Amount to the extent that
they relate to Seller's breach of its representations and warranties in Section
2.4 of the Agreement.
(b) Buyer shall only be liable for Seller Losses arising under this
Agreement solely to the extent that any such Seller Losses exceed, in the
aggregate, $10,000.00 (the "Buyer Basket Amount").
(c) The Seller's indemnification obligations under this Agreement shall not
exceed in the aggregate an amount equal to the Purchase Price (the "Seller's Cap
Amount"); provided, however, that Buyer Losses arising under or pursuant to
Sections 6.2(a)(i) to the extent that they relate to Seller's breach of its
representations and warranties in Section 2.4 of this Agreement shall not be
subject to the Seller's Cap Amount and there shall be no limitation on the
indemnification obligations of the Seller with respect to Buyer Losses arising
thereunder.
(d) Buyer's indemnification obligations under this Agreement shall not
exceed in the aggregate an amount equal to the Purchase Price (the "Buyer Cap
Amount").
(e) Once Buyer Losses exceed the Seller Basket Amount or Seller Losses
exceed the Buyer Basket Amount, as the case may be, a breach for which a party
is entitled to seek indemnification hereunder shall be deemed to occur upon the
initial Buyer Loss or series of related Buyer Losses or Seller Loss or series of
related Seller losses.
(f) Notwithstanding anything to the contrary elsewhere in this Agreement,
no party (or its affiliates) shall, in any event, be liable to any other party
(or its affiliates) for any consequential damages, including, but not limited
to, loss of revenue or income, or loss of business reputation or opportunity
relating to the breach or alleged breach of this Agreement.
Section 6.5. Guarantee. Parent hereby unconditionally and irrevocably
guarantees to Buyer the due and punctual performance by Seller under the
Agreement and the Other Agreements, including without limitation, payment by
Seller of any amounts that are due and payable in respect of Seller's
indemnification obligations under Section 6.2. Parent agrees that its
obligations hereunder are absolute and unconditional, irrespective of the
validity or enforceability of or any change or amendment to this Agreement, or
absence of any action to enforce the same, or any other circumstance that which
might otherwise constitute illegal or equitable discharge of, or defense to, a
guarantor. Parent hereby unconditionally waives protest, presentment, filing of
claims with the court in the event of bankruptcy, liquidation, reorganization or
similar case or proceeding of Parent, (b) any right to require that Buyer
proceed first against Seller or any other person or pursue any other remedy
available to Buyer, and (c) the right to consent to any act, omission or delay
which might in any manner or to any extent vary the risk, reduce the liability
or otherwise operate as a discharge of Parent.
<PAGE> 32
ARTICLE 7.
CERTAIN DEFINITIONS
The following terms (in their singular and plural forms as appropriate) as
used in this Agreement shall have the meanings set forth below unless the
context requires otherwise.
"Accounts Receivable" means all sums due to Company for sales and
deliveries of goods, performance of services and other business transactions,
including loans or advances to any Person, on the Closing Date.
"Affiliates" means any person or entity that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under,
control with a party hereto.
"Assets" means all of the assets, properties and rights of Company of every
kind, nature, character and description, whether tangible or intangible,
relating to or utilized in the Business, and including but not limited to the
following:
(i) all inventory;
(ii) all intellectual property related to GETS, GETS Lite, SITE,
BASE, RAPIDS, GETS-SAP R/3 interface including, without limitation, related
trademarks and service marks;
(iii) all Contracts;
(iv) all licenses;
(v) all computer software;
(vi) all databases;
(vii) all goodwill of the Business, including, but not limited to,
goodwill associated with the trademarks, service marks, and trade names and
assumed names;
(viii) all intangible personal property and assets other than the
foregoing including, without limitation, franchises, guarantees, warranties,
indemnities, certificates of authority, and waivers;
(ix) the customer lists, mailing lists, customer files, supplier
files, sales agent and manufacturers' representative files, credit files, domain
names, URLs, web sites and Internet and email addresses, and credit data
relating to the assets, all other files, records, drawings, catalogues,
stationery, advertising materials and other documents (or copies thereof)
related to the Assets or the Business, any Uniform Product Code Symbol of
Company and the use of any telephone numbers that are used in the operation of
the Business and any other tangible assets owned by Company on the Closing Date
and used in the Business;
(x) all deposits, prepaid sums, fees and expenses (including,
without limitation, rental fees, utility charges and service charges), trust
funds, retainages, escrows, monies and assets held by third parties, and
deferred charges, as the same shall exist as of the Closing Date with respect
to the Assets; and
(xi) any other assets used in the Business and owned by Company
including, but not limited to:
<PAGE> 33
(A) Company's 50% ownership interest in Duke/Acquion, LLC (and
such LLC's interest in RAPID LLP); and
(B) All customer and third party relationships including, but not
limited to SAP, D&T, Peoplesoft.
"Contract" means any written or oral contract, agreement, understanding,
lease, usufruct, license, commitment, arrangement, obligation, undertaking of
any kind or character or other document that is binding on any Person or its
assets.
"Employee Benefit Plan" shall mean and include with respect to any Person
any pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus or other incentive
plan, any other written or unwritten employee program arrangement, agreement or
understanding, including, without limitation, all incentive, bonus, deferred
compensation, flexible spending accounts, cafeteria plans, vacation, holiday,
medical, disability, share purchase or other similar plans, policies, programs,
practices or arrangements.
"ERISA Plan" means any Employee Benefit Plan which is an "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA, or an "employee
welfare benefit plan" as that term is defined in Section 3(l) of ERISA.
"Fluor Intercompany Transactions" means the contribution by Seller to the
equity capital of the Company and the Company's application of the proceeds of
such contribution to repay debt owed to Seller and to purchase assets from Fluor
Daniel, Inc.
"Joint Venture Agreement" means all contracts to which Company is, prior to
the Closing, a party relating to the formation and operation of Duke/Acquion,
LLC, a Delaware limited liability company, and RAPID LLP, a Maryland limited
liability partnership.
"License" means any license, franchise, notice, permit, easement, right
certificate, authorization, approval or filing that is binding on any Person or
its assets.
"Lien" means any mortgage, lien, security interest, pledge, hypothecation,
encumbrance, restriction, reservation, encroachment, infringement, easement,
lease, conditional sale agreement, title retention or other security
arrangement, adverse right or interest charge or claim of any nature whatsoever
of, on, or with respect to any property or property interest.
"Litigation" means any lawsuit, action, claim, arbitration or other legal
proceeding (including governmental investigations or criminal prosecution) and
notices received threatening or advising as to any of the foregoing proceedings.
"Loss" means any loss, liability, obligation, damage, claim, lawsuit, costs
and expense (including (i) interest and penalties, (ii) reasonable attorneys'
fees and expenses, and (iii) interest on any amount payable to a third party
with respect to a matter requiring indemnification).
"Material Adverse Change" or "Material Adverse Effect" means any event,
condition or change which materially and adversely affects or could reasonably
be expected to materially and
<PAGE> 34
adversely affect the assets, liabilities, financial results of operations,
financial condition, business or prospects of a party.
"Person" means a natural person or any legal, commercial or governmental
entity, such as, but not limited to, a corporation, general partnership, joint
venture, limited partnership, limited liability company, trust, business
association or any person acting in a representative capacity.
"Service Contracts" means (a) the Services Agreement dated March 18, 1997,
between the Company and Texaco Group, Inc., (b) the Master Professional Services
Contract dated April 23, 1996, between the Company and BP Exploration & Oil,
Inc., and (c) the Technical Service Agreement dated March 3, 1997, between
Company and Austrian Energy & Environment SGP/Waagner-Brio Gmbtt.
ARTICLE 8.
MISCELLANEOUS PROVISIONS
Section 8.1. Notices. All notices, communications and deliveries hereunder
shall be made in writing signed by the party making the same, shall specify the
Section hereunder pursuant to which it is given or being made, and shall be
delivered personally or by telecopy transmission or sent by registered or
certified mail or by any express mail service (with postage and other fees
prepaid) as follows:
To Buyer: Buyer Corp.
1055 Lenox Park Boulevard
Atlanta, Georgia 30319
Attn: President
Telecopy No.: 404-841-4399
To Seller: Seller, Inc.
Parent Corporation
3353 Michelson Drive
Irvine, California 92698
Attn: General Counsel
Telecopy No.: 714-975-4450
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing.
Section 8.2. Entire Agreement; Modifications and Amendments. This
Agreement, the Schedules, the Exhibits and the Other Agreements constitute the
entire agreement between the parties relating to the subject matter hereof and
thereof and supersede all prior oral and written agreements. This Agreement may
not be amended, supplemented or otherwise modified except by an instrument in
writing signed by each of the parties hereto and no oral waiver to this sentence
shall be valid. Whenever terms defined in this Agreement are used in any Exhibit
or Schedule hereto, such terms shall have the meanings ascribed to them herein
unless they are otherwise defined in such Exhibit or Schedule. The term
"Agreement" shall mean this instrument and all Exhibits and Schedules hereto and
the words "herein," "hereof," "hereunder," "hereto," "hereby,"
<PAGE> 35
and words of similar tenor shall refer to this instrument in its entirety
including the Exhibits and Schedules hereto.
Section 8.3. Assignment; Successors-in-Interest. No assignment or transfer
by Buyer or Seller of their respective rights and obligations hereunder prior to
the Closing shall be made except with the prior written consent of the other
parties hereto. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their permitted successors and assigns, but no
assignment shall relieve any party of its obligations hereunder. Any reference
hereto shall also be a reference to a permitted successor or assign.
Section 8.4. Number; Gender. Whenever the context so requires, the singular
number shall include the plural and the plural shall include the singular, and
the gender of any pronoun shall include the other gender.
Section 8.5. Captions. The titles, captions and table of contents contained
in this Agreement are inserted herein for convenience and for reference only and
in no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision hereof. Unless otherwise specified to the contrary, all
references to Articles and Sections are references to Articles and Sections of
this Agreement and all references to Schedules and Exhibits are references to
Schedules and Exhibits to this Agreement.
Section 8.6. Controlling Law; Integration. This Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State
of Georgia without reference to Georgia's choice of law rules. The parties
hereto hereby agree that any legal proceeding instituted with respect to this
Agreement shall be brought in Atlanta, Georgia and the parties hereby submit to
personal jurisdiction therein and agree that venue properly lies therein. This
Agreement supersedes all negotiations, agreements and understandings among the
parties with respect to the subject matter hereof and constitutes the entire
agreement among the parties hereto.
Section 8.7. Knowledge of Company, Seller and Buyer. As used in this
Agreement, the terms "the best knowledge of Company or Seller," "known to
Company or Seller" or words of similar import used herein with respect to
Company and Seller shall include the actual knowledge of certain executives of
Company and of Seller set forth hereafter, together with the knowledge a
reasonable business person would have obtained after making reasonable inquiry
and after exercising reasonable diligence with respect to the matters at hand.
The Company's executives shall consist of Carl Falk, Robert Novak and Steve
Hamman. The Seller's executives shall consist of Jeff Putman and, for purposes
of this Agreement, Tom Hoyer, notwithstanding the fact that Tom Hoyer is not an
officer of Seller. As used in this Agreement, the terms "the best knowledge of
Buyer," "known to Buyer" or words of similar import used herein with respect to
Buyer shall include the actual knowledge of James Davis, President of Buyer,
together with the knowledge a reasonable business person would have obtained
after making reasonable inquiry and after exercising reasonable diligence with
respect to the matters at hand.
Section 8.8. Severability. Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition
<PAGE> 36
or unenforceability in any jurisdiction will not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by law, the parties hereto waive any provision of law which renders any such
provision prohibited or unenforceable in any respect.
Section 8.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 8.10. Enforcement of Certain Rights. Nothing expressed or implied
in this Agreement is intended, or shall be construed, to confer upon or give any
person, firm or corporation other than the parties hereto, and their successors
or assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, or result in such person, firm or corporation being deemed a
third party beneficiary of this Agreement.
Section 8.11. Waiver. Any agreement on the part of a party hereto to any
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. A waiver by one party of the performance of any
covenant, agreement, obligation, condition, representation or warranty shall not
be construed as a waiver of any other covenant, agreement, obligation,
condition, representation or warranty. A waiver by any party of the performance
of any act shall not constitute a waiver of the performance of any other act or
an identical act required to be performed at a later time.
Section 8.12. Fees and Expenses. The parties hereto each shall pay their
respective fees, costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby, including, but not limited to, the
fees, costs and expenses of its financial advisors, accountants and counsel.
Section 8.13. Further Assurances. The parties hereto agree to furnish upon
request to each other such further information, to execute and deliver to each
other such other documents, and to do such other acts and things, all as the
other party hereto may at any time reasonably request for the purpose of
carrying out the intent of this Agreement and the documents referred to herein.
Section 8.14. Public Announcements. The timing and content of all
announcements regarding any aspect of this Agreement to the financial community,
government agencies, employees or the general public shall be mutually agreed
upon in advance (unless Buyer or Seller is advised by counsel that any such
announcement or other disclosure not mutually agreed upon in advance is required
to be made by law, and then only after making a reasonable attempt to comply
with the provisions of this Section).
Section 8.15. Interest. Any amounts owed to a party hereunder, shall accrue
interest at the "Prime Rate" (as reported in the "Money Rates" table in The Wall
Street Journal) from the date such that a party owing such sum is notified until
the date that such amount is actually paid. The "Prime Rate" shall be adjusted
as of the first day of each month based on the rate reported in The Wall Street
Journal as of the first business of such month.
<PAGE> 37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date first above written.
"BUYER":
HARBINGER CORPORATION
By: /s/ James C. Davis
-------------------------------
Title: President
---------------------------
"SELLER":
FD ENGINEERS & CONSTRUCTORS, INC.
By: /s/ Thomas J. Putnam
-------------------------------
Title: Vice President
----------------------------
"PARENT":
FLUOR CORPORATION
By: /s/ L. N. Fisher
-------------------------------
Title: Secretary
----------------------------
<PAGE> 1
EXHIBIT 99.1
Contact: Larry Forman Contact: Carl Falk
Vice President, Business Development President
Harbinger Corporation ACQUION, Inc.
Phone: 404-467-3295 Phone: 864-281-4207
E-Mail: lforman@harbinger. E-Mail: [email protected]
Internet: www.harbinger.com Internet: www.acquion.com
For Immediate Release....
HARBINGER CORPORATION ACQUIRES ACQUION, INC.
-EXPANDS ITS ELECTRONIC COMMERCE SOLUTIONS FOR MRO PROCUREMENT AND CATALOGS-
ATLANTA - AUGUST 25, 1997 Harbinger Corporation (NASDAQ:HRBC), a leading
supplier of Electronic Commerce (EC) software and services, today announced the
acquisition of ACQUION, Inc., a division of Fluor Corporation, an engineering
and construction firm. ACQUION, based in Greenville, South Carolina provides
electronic catalogs and procurement solutions for business-to-business
electronic commerce. Harbinger purchased the stock of ACQUION for $12.0 million
in cash. In connection with the acquisition, Management expects charges for
in-process research and development and transaction and integration-related
charges of between $11 million and $14 million.
"We see the acquisition of ACQUION as adding another key component to our
supply chain management offerings ," said David Leach, CEO of Harbinger
Corporation. "ACQUION has amassed MRO content for hundreds of suppliers
representing nearly 4 million items and this is growing at 30 suppliers per
month. Many of our customers are already experiencing the benefits of this
technology to better manage and control their purchasing, saving 5-12% on
all MRO supplies purchased. Harbinger's core competencies will greatly
enhance ACQUION's ability to enable MRO catalog purchases across a wide
range of industries. The ACQUION E-catalog offering (GETS) easily
integrates with our other products and is a natural extension of our
current EDI/EC activities. The key success factors for ACQUION - mass
deployment for supplier recruitment, integration with ERP systems, trusted
third party services (for managing content), and a networking
infrastructure-are identical to those needed for EDI enablement."
"By combining with Harbinger Corporation, we can provide a more complete
procurement solution for business-to-business electronic commerce," said
Carl Falk, President of ACQUION. "This allows us to not only provide the
leading MRO supplier content and electronic catalog technology, but also to
provide a fully integrated end-to-end solution to complete purchase
transactions. We have worked closely with Harbinger over the last 2 years
and have offered their EDI translation software and VAN services to many of
our large customers. This combination creates synergies that will benefit
both of our companies' customers. We expect to leverage off of Harbinger's
Internet technology as well as utilize their domestic and international
sales channels to deploy this solution to large, multi-national customers."
CSR America, Inc. (CSRA), a subsidiary of Australian-based CSR Ltd., one of
the world's largest suppliers of building and construction materials,
selected SAP (TM) R/3 (TM) to rationalize their business processes and to
optimize purchasing operations. CSR was one of the first SAP clients to
implement GETS and was an active contributor to the development process.
John Crockett, Director of Supply Management, recently commented, "The
Materials Management module in R/3 is more than adequate: it has a
classification system, it provides a mechanism to search for items and it
issues POs, but it can be a rather intricate process. We currently use
10-15,000 different suppliers covering our 200 US sites; we wanted a
solution that is easy to use and would facilitate compliance with national
agreements significantly reducing costs, promote electronic commerce
reducing transaction costs, and minimize R/3 training requirements."
Commenting on GETS as an enhancement to their R/3 installation, Tim Gow, a
member of CSRA's R/3 Implementation Team, explains, "GETS will allow people
to spend as little time as possible on purchasing
<PAGE> 2
and as much as possible on their area of expertise. This happens in two
important ways: First, the user-friendliness of the product makes creating
POs in R/3 quicker and easier. Second, GETS automates the complete
purchasing cycle from supplier communications to invoice verification,
providing accurate information with virtually no human intervention. On the
administrative side, GETS reduces the time spent on catalog maintenance by
orders of magnitude since ACQUION works very closely with suppliers to
optimize the quality and timeliness of the catalog content."
"Our suppliers play an integral role in the procurement process and had to
be considered in our evaluation of GETS. We believe the benefits of using
GETS are as large for suppliers as they are for CSRA. Suppliers will save
on transaction costs, order entry and customer inquiries; it will cost them
less to do business with CSRA. There will be greater compliance with
pre-negotiated supplier agreements which, combined with the fact that GETS
is easy to use, will increase the number of purchases from suppliers within
GETS catalogs," notes Crockett.
Matt Bohn , Purchasing Process Optimization Manager at Hoechst Celanese
Specialty Chemicals Division, states, "ACQUION does not approach the
problem as "turning paper catalogs into electronic ones" as other vendors
do. Other vendors make the false assumption that a requisitioner would know
what supplier he wanted to buy a part from, and go directly to that catalog
to order the item. ACQUION's approach demonstrates a greater understanding
of MRO purchasing, allowing an MRO requisitioner to find the item he is
looking for, the way he would optimally look for it: by searching all
catalogs, and then selecting the supplier who could best serve his needs."
ACQUION's product line is complementary to SAP's (TM) R/3 (TM) solution.
Recently SAP announced at SAPPHIRE '97, SAP's annual North American user
conference in Orlando, Florida, that SAP will resell ACQUION's MRO supplier
content as part of the R/3 MRO Catalog solution. Utilizing and adopting
this technology with an R/3 procurement solution saves the customer money,
increases security and enables users to take further advantage of their
enterprise solution investment.
ABOUT ACQUION, INC.
ACQUION's strategic focus is on supply chain management and
acquisition-related services utilizing electronic commerce technology. To date,
ACQUION has provided innovative MRO electronic supplier catalogs that offer
up-to-date information. ACQUION offers clients robust MRO catalog content and
cataloging expertise, as evidenced by their catalog content for leading
chemical, petrochemical, and industrial corporations and universities. These
electronic catalogs are among the first to be integrated into today's enterprise
and legacy computer systems. Formed in 1994 as a subsidiary of Fluor Daniel and
headquartered in Greenville, SC, ACQUION employs a staff of procurement
specialists to deliver its leading MRO catalog solutions and implementation
services.
ABOUT HARBINGER CORPORATION
Measured by individual customer count, Harbinger is the world's leading
single-source provider of Electronic Commerce/EDI software with more than
43,000 active revenue generating customers utilizing the company's products
and services. In addition to millions of EDI transactions, over $1.5
billion in Automated Clearing House (ACH) transfers flow through the
Harbinger Network each month. Since 1988, Harbinger Corporation has been
dedicated to providing comprehensive scalable Electronic Commerce and EDI
software and value-added network solutions from desktops to mainframes.
Harbinger is also devoted to meeting the market needs for Internet-based
Electronic Commerce with Web-based EDI products and services.
Harbinger's more than 685 employees offer worldwide service and support.
Harbinger's corporate headquarters are located in Atlanta, Georgia, USA;
the Harbinger US Software Division is headquartered in Atlanta, Georgia,
USA and the Harbinger Industry Solutions Division is headquartered in Ann
Arbor, Michigan, USA. The company also has operations in The Netherlands,
Germany, the United Kingdom, Italy, and Mexico. Additionally, Harbinger has
relationships with an international network of more than 20 Value-Added
Resellers to market and support its software worldwide.
<PAGE> 3
For information on Harbinger's full line of products, please visit our site
on the World Wide Web at http://www.harbinger.com. For information on
ACQUION's products, visit their web site at http://www.acquion.com.
This press release contains statements which may constitute
"forward-looking statements" within the meaning of the Securities Act of
1933 and the Securities Exchange Act of 1934, as amended by the Private
Securities Litigation Reform Act of 1995. 15 U.S.C.A. Sections 77Z-2 and
18U-5 (Supp. 1996). Those statements include statements regarding the
intent, belief or current expectations of Harbinger Corporation and members
of its management as well as the assumptions on which such statements are
based. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
contemplated by such forward-looking statements. Important factors
currently known to management that could cause actual results to differ
materially from those in forward-looking statements are set forth in the
Safe Harbor Compliance Statement for Forward-Looking Statements included as
Exhibit 99.1 to the Company's Current Report on Form 8-K dated and filed
July 16, 1997. The Company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the occurrence
of unanticipated events or changes to future operating results over time.
###
Harbinger is a registered trademark of Harbinger Corporation. TrustedLink is a
services mark of Harbinger Corporation. GETS is a services mark of ACQUION, Inc.
All other company and product names referenced herein are registered trademarks
or trademarks of their respective owners.
